US Dollar Index retreats from a new year-to-date high around 95.97, steady around 95.80s

• The US Dollar Index extends to two-consecutive days its rally in the week.
• The US 10-year Treasury yield edges up to 1.64%, underpins the buck.
• DXY Technical outlook: A break above 96.00 exposes June 30, 2020, high at 97.80
• US Dollar Index retreats from a new year-to-date high around 95.40, bull's eye 96.00.

The US Dollar Index, also known as DXY, which measures the greenback’s performance against a basket of six rivals, advances 0.57%, sitting at 95.88 as the Asian session begins at the time of writing. The US dollar was boosted by upbeat comments of St. Louis Fed President Bullard, who will be an FOMC voter in 2022. Also, positive macroeconomic data from the biggest economy lifted the prospects of the buck, despite the risks of higher inflation.

On Tuesday, in the New York session, the US Census Bureau revealed that October’s Retail Sales in the US rose by 1.7%, higher than the 1.4% foreseen by economists. Further, it reported that sales excluding Autos increased by 1.7%, precisely at the same rhythm as the headline, more than the 1% estimated. 

The jump in retail sales showed the resilience of consumers, despite having elevated prices to pay. It is worth noticing that the figure is not adjusted for any price changes that reflect the increased cost of goods and services. Receipts at gasoline pumps spiked almost 4%, the highest reading since March of 2021, reflecting how people are paying some of the highest prices in seven months. 

Moreover, US Industrial Production for October rose by 1.6%, better than the 0.7% expected by economists. 

US Dollar Index (DXY) Price Forecast: Technical outlook

The daily chart depicts the DXY has broken above the Pitchfork’s indicator’s central line around the 95.50-60 region, which now would act as support. The daily moving averages (DMA’s) remain well below the current price action, with an upslope, supporting the upward bias. Also, the Relative Strength Index (RSI) at 71 in overbought conditions, though slightly flattish, indicates that the DXY might consolidate before resuming the upward move. 

A break above 96.00 would expose its first resistance area on June 30, 2020, high at 97.80. A breach of the latter could send the US Dollar Index rallying towards May 25, 2020, high at 99.97.